Two more States – Kerala and West Bengal choose Option-1 to meet the GST implementation shortfall

25 States and all Union Territories with Legislative Assembly have favored Option-I Kerala and West Bengal will get Rs. 10,197 crore through special borrowing window to meet the GST implementation shortfall.

Permission to raise additional Rs. 11,309 crore through borrowings also issued to Kerala and West Bengal.

Governments of Kerala and West Bengal have communicated their acceptance of Option-1 to meet the revenue shortfall arising out of GST implementation.  The number of States who have chosen this option has gone up to 25. All the 3 Union Territories with Legislative Assembly (i.e. Delhi, Jammu & Kashmir and Puducherry) have also decided in favour of Option-1. 

The States & Union Territories who choose Option-1 are getting the amount of shortfall arising out of GST implementation through a special borrowing window put in place by the Government of India. The window has been operationalised since 23^rd October, 2020 and the Government of India has already borrowed an amount of Rs. 24,000 crore on behalf of the States in four instalments and passed it on to the States and Union Territories, who chose Option -1 on 23^rd October, 2020, 2^nd November, 2020, 9^th November, 2020 and 23^rd November, 2020. Now the State of Kerala and West Bengal will also receive funds raised through this window starting from the next round of borrowings.

 Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, the States are also entitled to get unconditional permission to borrow the final instalment of 0.50% of Gross State Domestic Product (GSDP) out of the 2% additional borrowings permitted by the Government of India, under Atmnirbhar Abhiyan on 17^th May, 2020.

This is over and above the Special Window of Rs. 1.1 lakh crore. On receipt of the choice of Option-1 from the Government of Kerala and West Bengal, the Government of India has granted additional borrowing permission of Rs. 4,522 crore to the State Government of Kerala (0.5% of Kerala’s GSDP) and Rs. 6,787 crore to the State Government of West Bengal (0.5% of West Bengal’s GSDP) .

The amount of additional borrowing permission granted to 25 States and the amount of funds raised through special window and released to the 23 States and 3 Union Territories so far is annexed.

State wise additional borrowing of 0.50 percent of GSDP allowed and amount of funds raised through special window passed on to the States/UTs till 23.11.2020

(Rs. in Crore)

S. No.	Name of State / UT	Additional borrowing of 0.50 percent allowed to States	Amount of fund raised through special window passed on to the States/ UTs
1	Andhra Pradesh	5051	672.61
2	Arunachal Pradesh*	143	0.00
3	Assam	1869	289.54
4	Bihar	3231	1136.27
5	Goa	446	244.39
6	Gujarat	8704	2683.88
7	Haryana	4293	1266.68
8	Himachal Pradesh	877	499.74
9	Karnataka	9018	3611.17
10	Kerala #	4,522	0.00
11	Madhya Pradesh	4746	1321.98
12	Maharashtra	15394	3486.24
13	Manipur*	151	0.00
14	Meghalaya	194	32.51
15	Mizoram*	132	0.00
16	Nagaland*	157	0.00
17	Odisha	2858	1112.42
18	Rajasthan	5462	645.06
19	Sikkim*	156	0.00
20	Tamil Nadu	9627	1816.66
21	Telangana	5017	164.41
22	Tripura	297	66.04
23	Uttar Pradesh	9703	1748.29
24	Uttarakhand	1405	674.27
25	West Bengal #	6787	0.00
	Total (A):	100240	21472.16
1	Delhi	Not applicable	1706.93
2	Jammu & Kashmir	Not applicable	661.21
3	Puducherry	Not applicable	159.70
	Total (B):	Not applicable	2527.84
	Grand Total (A+B)	100240	24000.00

* These States have ‘NIL’ GST compensation gap

# Funds will be released starting from next round of borrowing.

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